The Indian government, led by Prime Minister Narendra Modi ji has bought several transformations in tax administration. This was supported by digitalization, in the transformative new era of efficiency, transparency and accountability. The shift was first unveiled during the annual conclave of Tax Administration Authorities – ‘Rajasva Gyan Sangam’ held in June 2016. At this meeting, Prime Minister Modi unveiled his visionary vision encompassing ‘RAPID’, an acronym for Revenue, Accountability, Integrity, Information and Digitization this gave rise to various reforms aimed at overhauling traditional methods a it is used for manual analysis in practice for many years.
The first major milestone in this journey was the launch of “E-Assessment Scheme 2019” on 07-10-2019. The project aims to modernize age-old assessment methodologies, ensure greater transparency, efficiency and accountability in the tax process a National e-Assessment Center was set up in New Delhi, and in a pilot phase, 58,322 routine assessment cases were selected under the scheme for assessment year 2018-19. In the very next on 13-8-2020, another moment began when Prime Minister Narendra Modi ji inaugurated the ‘honoring the Honest’ tax forum. This session highlighted three dramatic changes: faceless investigations, faceless litigation, and government contracts. The goal was clear – to create a tax system that not only encouraged but also celebrated honesty.
With the introduction of ‘Honor the Honest’ tax scheme, e-Assessment Scheme 2019 replaced new face less assessment scheme 2019. as we could find earlier through voluntary disclosure schemes, the dishonest was honored by giving him scope with penalty instead of punishments. The amendment affected all regular assessments under Section 143(3) for the AY 2018-19 and pending income escaping assessments under Section 147, excluding cases under central and international taxation charges.
In exercise of its powers under Section 143(3A) of the Income Tax Act, the Central Board of Direct Taxes (CBDT) issued an important notification dated 13-8-2020 (F.No. S.O. 2745 (E). This notification revolutionized the e-Assessment Scheme 2019, officially by renaming it as “Faceless Assessment Scheme 2019”. The basic principle was to reduce direct contact between authority and taxpayers and to make all accounts faceless.
The journey continued with the taxation and other laws (Relaxation and Amendment of Certain Provisions) Act 2020. This Act expanded scope of the E-Governance, entire process of assessments, rectifications and revisions etc, under the faceless proceedings. Along with Section 144B also introduced mandating assessment of income tax faceless and procedure for the conduct of the same.
Effective from 01.04.2021, section 144B considered all legislative provisions from the faceless assessment scheme, including definitions, procedure, communication between assessee and income tax department even to the extent of authentication of records and elimination of personal appearance in income tax offices.
Central Government has been digitizing the process under the income tax act, reducing person to person interactions by the great usage of technology. This approach aims to provide optimum collection of resources and team based assessment system with dynamic jurisdiction. A series of futuristic reforms have been introduced in the domain of Direct Tax Administration starting from faceless assessment in electronic mode and gradually phasing into provisions o f the income tax act 1961. This strategic evolution in the department promises a technologically advanced system and also focus on serving best interest of tax payers and overall economy.
Conclusion: India’s journey in transforming tax administration through faceless assessments signifies a pivotal shift towards a modern, transparent, and accountable system. The adoption of technology, elimination of direct contact, and legislative reforms underline a commitment to efficiency and fairness. As the system evolves, it holds the promise of serving the best interests of taxpayers while contributing to the overall economic growth. Stay tuned for more insights into the ongoing reforms shaping India’s tax landscape.
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